NEW DELHI:A forum representing technology, research and development, and chip design providers has asked the government to re-impose the import duty on mobile phone components, arguing that it must take the next step towards bringing full-scale manufacturing in the country.

Broadband India Forum, which represents a gamut of companies including Bharti Airtel, Vodafone, Hughes, Qualcomm, satellite communication provider Intelsat and Swedish wi-fi provider Bluetown, has asked the telecoms ministry to levy the combined 29% duty on batteries, chargers, wired headsets and populated printed circuit boards (PCBs), and argued that the move to partially roll back this duty would not be in the interest of the government’s ‘Make in India’ and ‘Design in India’ campaigns.

“The recent announcement has pushed the country back to the days of phone assembly, instead of progressing to a phased-manufacturing regime,” said TV Ramachandran, president, Broadband India Forum.

“We request the government to withdraw this notification immediately,” the forum said in a note to the departments of electronics and information technology (DeitY), telecom (DoT) and industrial policy and promotion (DIPP). The government partly rolled back the 29% import duty that it had imposed in the 2016-17 Budget on mobile phone components such as charger, battery, adapter and wired headsets through a notification on May 6, such that importers need to pay only countervailing duty of 12.5%. The government rolled back the basic custom duty and special additional duty on these products.

Separately, it also rolled back the special additional duty on printed PCB from 2% and made it zero. PCB is one of the most critical components to make smartphones and accounts for 15-18% of the manufacturing cost of a smartphone.

The broadband forum warned that no entity would design and invest in R&D in India if the PCB continues to be imported from China at no import cost, in fully-manufactured form. In doing so, it has gone against lobby groups representing handset makers that had sought the rollbacks.

BIF argued that the present duty structure would only be a set back to the country's plans to reach a net-zero level of electronic imports at a time when the country’s electronic import bill, at $400 billion by 2020, may just top the oil import bill.

It added that levy of 12.5% on fully made smartphones would only limit local value addition to 1-2%. It also sided with increasing import duty on PCBs, arguing that assembly of PCBs in India will immediately increase value addition to 10% from the current 1%. Not imposing a levy would instead prevent any local value addition.

Such a move would also raise the quality of jobs and encourage component manufacturing in India by enabling components to be consumed locally. It would also prevent component manufacturing to move to other markets that provide better economic conditions, compared to India.

Jio’s Rs 2,399 annual plan offers 2GB per day data that costs effectively Rs 200 per month. It also offers unlimited voice and SMS. Airtel and Vodafone Idea’s Rs 2398 and Rs 2399 annual plans, on the other hand, offer 1.5GB per day data along with unlimited voice and SMS